Economy

ISM Services PMI Rises to 57.8 in September, Beating Forecast

U.S. Service Sector Activity Stronger than Expected in September

United States Postal Service (USPS) workers don face masks and gloves behind plexiglass at the USPS location on N. Main in Gainesville, Fla., during the coronavirus (COVID-19) pandemic. (Photo: People’s Pundit Daily/PPD)

Tempe, Arizona (PPD) — The Institute for Supply Management Services PMI (NMI) rose more than expected for September, beating forecasts at 57.8. The reading indicates economic activity in the services sector grew for the fourth month in a row.

The 0.9 gain exceeds the high end of the forecast range for the month. Forecasts ranged from a low of 55.0 to a high of 57.4. The consensus forecast was 56.3.

“According to the Services PMI, 16 services industries reported growth. The composite index indicated growth for the fourth consecutive month after contraction in April and May,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee.

“Respondents’ comments remain mostly optimistic about business conditions and the economy, which correlates directly to those businesses that are operating. There continues to be capacity and logistics issues, as business volumes have increased.”

ISM Services PMI and Manufacturing PMI

	Services PMI^™	Manufacturing PMI^®
Index	Series Index Sep	Series Index Aug	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Sep	Series Index Aug	Percent Point Change
Services PMI^™	57.8	56.9	+0.9	Growing	Faster	4	55.4	56.0	-0.6
Business Activity/ Production	63.0	62.4	+0.6	Growing	Faster	4	61.0	63.3	-2.3
New Orders	61.5	56.8	+4.7	Growing	Faster	4	60.2	67.6	-7.4
Employment	51.8	47.9	+3.9	Growing	From Contracting	1	49.6	46.4	+3.2
Supplier Deliveries	54.9	60.5	-5.6	Slowing	Slower	16	59.0	58.2	+0.8
Inventories	48.8	45.8	+3.0	Contracting	Slower	2	47.1	44.4	+2.7
Prices	59.0	64.2	-5.2	Increasing	Slower	6	62.8	59.5	+3.3
Backlog of Orders	50.1	56.6	-6.5	Growing	Slower	4	55.2	54.6	+0.6
New Export Orders	52.6	55.8	-3.2	Growing	Slower	2	54.3	53.3	+1.0
Imports	46.6	50.8	-4.2	Contracting	From Growing	1	54.0	55.6	-1.6
Inventory Sentiment	55.4	52.5	+2.9	Too High	Faster	2	N/A	N/A	N/A
Customers’ Inventories	N/A	N/A	N/A	N/A	N/A	N/A	37.9	38.1	-0.2
Overall Economy	Growing	Faster	4
Services Sector	Growing	Faster	4

Services ISM^® Report On Business^® data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment indexes. Manufacturing ISM^® Report On Business^® data is seasonally adjusted for New Orders, Production, Employment and Inventories indexes.
**Number of months moving in current direction.

The 16 services industries reporting growth in Services PMI for September — listed in order — are: Arts, Entertainment & Recreation; Utilities; Management of Companies & Support Services; Transportation & Warehousing; Health Care & Social Assistance; Wholesale Trade; Real Estate, Rental & Leasing; Accommodation & Food Services; Construction; Public Administration; Educational Services; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Retail Trade; Information; and Other Services.

The only industry reporting a decrease in September is Professional, Scientific & Technical Services.

The Services PMI was previously known as the Institute for Supply Management Non-Manufacturing Index (NMI).

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PPD Business Staff

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